30 Nov 2015 - Back To Work Monday

Hope everyone had a delish Thanks Giving in the US of A.  The daily chart starting off the week is showing weak momentum and a weak price movement.  So far no negative divergence can be seen unless prices in the SPX shoots up above the previous highs made in early Nov.

The intra-day charts is so far bearish for the hour with the ST still holding to the UP side.  Look to the intra-day charts to move back up above the mid-point to resume bullish trades, where an OS reading will signal a cover on those who are long the market.  Support and resistance still dictate the price movement sideways currently until we have a firm breakout from it.

Remember that the Market is currently up trending on a bearish market...

I was sent this by a friend and thought I would share it with you folks;
http://inflation.us/wp-content/uploads/2015/11/2016economiccrisisreport.pdf

If you are long, then you are probably one of the statistics on this report.  While the Smart Crooks have left the building with your cash.  Don't drink too much Egg Nog this holiday people...

SEN: Bearish
ST: UP
PA: NA

25 Nov 2015 - Enjoy The Turkey For Those South Of The Boarder

The market was relatively flat today, as can be expected from an eve to a holiday.  This could be setting up for a rise on Friday though.  Perhaps we will get some good Black Friday Numbers to stuff that Turkey.  2065 still remains as support with resistance at current level SPX.

SEN: Bearish
ST: UP
PA: UP

24 Nov 2015 - Back Stabbing

Russia is feeling back stabbed by Turkey today, as said by President Putin in regards to the shooting down of their bombers.  Bears seems to be in the same boat as prices quickly rallied back to green after the first few hours of the open.  "Serious or worried" about war doesn't seem to be in everyone's mind.  Prices in the SPX however is still under the Gann angle.  We need to see if this will cause the price rise to stall, but remember that there are numerous supports right underneath near 2065.  Ultimately this needs to break for a sustained move lower.  Otherwise this is "still a bull run in a bearish market".

Intra-day signal is bullish and in SYNC with the ST, but any high tomorrow in prices could cause a neg. divergence.  Again, divergences do not mean that a reversal is guaranteed, but could potentially warn of a weakening momentum until the next reset occurs.  So keep the signal in mind for tomorrows open.  Bearish if it falls below 50 and Bullish if it stays above... It's as simple as that.

Note:  I kept the option 1 (Red Dotted Line) on the chart, but prices are more likely following in the way of the 2nd (Green Dotted Line).  Any break of the blue dotted trend line will be my signal to go short.  Also in regards to 5th waves, a failure to make a new ATH in the markets is also acceptable as it is commonly seen in final push up in price.  So be nimble my friends.

SEN: Bearish
ST: UP
PA: NA

23 Nov 2015 - It Wasn't A Hard On After All

This morning, the thought of the markets being up on the merger of Pfizer and Allergan got me thinking Viagra instead of Botox.  Well I guess, there was no hard-on after all, just a slight lift is all.  I guess we need a few more shots of Botox for the indexes since we have been lingering in the red for much of the day.  The ST is still bullish and have hit that annoying Gann angle I have been showing for the past month.  Perhaps it is telling me that this line represents a significant resistance support pivot.

On an intra-day basis, the 200 and 75 moving averages is close to turning bearish which you can see below in the 60 min. chart which is also the range the 200 Day MA resides.  This will be a challenge for the bears to breakdown for sure.  If we do have the lower trendline support (Blue Dotted) for prices we should look for the signal in the 60 Min. chart to turn up before a long position can be placed.  A breakdown of that trendline could have us revisit under that as a resistance via a rally.

SEN: Bearish
ST: UP
PA: NA

20 Nov 2015 - Still 3 Wave Lookin'

The rally is still looking like a 3 wave pattern.  We should keep alive the possibility of a 5 wave move since our ST is still UP.  This weeks close suggest that we will likely break the highs made 3 weeks ago in the SPX.  With the weekly chart in OB territory it is also a possibility that we would make an ATH.  Perhaps no one wants to have a red Thanks Giving holiday.  Prices this week was just short of an engulfing candle, but remains bullish.  The line the bears need to break now will be the 75 Weekly MA at 2036.

One thing to note is that the Russell and NYSE is lagging dramatically.  This is worrying since this would indicate that the small caps are not participating and are weak while the market is only buoyed by the blue chips.  The buy backs and this weeks IPO's have been through the roof.  With these divergences, I don't see these index highs sustaining for much longer.

SEN: Bearish
ST: UP
PA: UP

19 Nov 2015 - Forming Like A 4th

The pattern today seems to be forming a 4th wave.  This however is a smaller degree 4th, but we should still see a higher move tomorrow and perhaps a 2090 target in the SPX.  What happens after that is another question. With the end of the week closing tomorrow, a bullish scenario would look most likely if prices do not at least retrace to the start of the weeks open to form a reversal candle.  The bearish scenario would also see this 3 wave rally end and can be confirmed when prices break below  2065 retracing the last smaller degree high.

Nothing has changed in terms of our general direction.  ST still remains UP...

SEN: Bearish
ST: UP
PA: UP

18 Nov 2015 - Testing Gann Again

As you can see prices for the SPX has stopped right under the Gann angle.  Now I know that this is an orthodox way of using Gann angles but if prices are respecting it then why wouldn't we use it as part of our analysis?  Since our ST has turned up from yesterday prices validated the signal by its continued move higher today.  This bullish strength in a bearish market is impressive, but we should not lose sight of the larger picture.  Any move lower should be much stronger than the strong rally we have been seeing this week. Ed Carlson's  Lindsay analysis has a probable high near the end of the month possibly right after thanks giving.  You can read it HERE..

As for our own analysis,  we are hitting a resistance that is obvious to the naked eye when looking to the left of the chart.  Prices could still push through this as our ST is on the uptrend, but if this is a corrective move a-b-c from this weeks low, then we should be looking for a 3 wave move up which we have currently.  If we get another wave higher then it is possible that we are pushing towards a diagonal ATH to perhaps finish of a 5 wave rise.  This would make a the flash crash in Aug a corrective event.

The intra-day charts has stayed in the bullish end for most of the day and in OB territory hence our 33 pt. rise.  We also have a neg. divergence that we need to be aware of so could this be the signal for a turn-a-round tomorrow?

SEN: Bearish
ST: UP
PA: UP

17 Nov 2015 - Resisting Overhead

SPX touched the 200 day MA and reversed back down today.  This is not anything surprising, but what is, is that we have an turn up on the ST.  With the intra-day being in bullish territory, we can see that the impulse that started yesterday is something to be respected.  The caution now belongs to the bears, a new uptrend might be at hand.

Some are asking why I am advising caution at every turn.  Well,  although some are in the business of absolute forecasting, I cannot at all say that I am 100 percent sure that markets are in a bear or bull market.  What I know is weighing the risk and probabilities which favour our trades.  By all means, I encourage you to do your own analysis and follow your trading rules.  I cannot say that mine is the perfect system, but I do know it is a safe one.

The overall sentiment is still bearish but this up move is counter acting the sentiment causing a imbalance.  This is not what I call a safe trade even if we have a rally like the one that happened back in late Sept - early Oct.  Yesterdays mention of a diagonal triangle can now be considered a candidate for a pattern formation.  If the intra-day continues the uptrend then we should look for more impulsive behaviour from prices.  Otherwise if we get an OS reading in the signal I would initiate my short again.

SEN: Bearish
ST: UP
PA: NA

Note: I mentioned yesterday also that we should look for a pull back pattern, and based on today's pullback, it seems that a 3 wave pattern has formed.  This is a suggestion that we err on the side of bullish move tomorrow in a bearish market.

If you do not understand my reasoning with my words,  I am merely stating that risk of acceleration or impulsive moves usually occur within its trend. Therefore even if we are bullish, we should be better off planning for a bearish trade when the signals have turned to take advantage of accelerations and impulsive formations.  Trading all ups and downs is just lunacy..  Stress is more likely the end result regardless if you make money or not.

16 Nov 2015 - Bullishly Cautious

The SPX was true to form, and the expected lower low was achieved today to the 2020 mark.  Does this suggest a continued lower projection?  This we do not know, so what we can use to analyse the short-term is to look at the intra-day behaviour which at the moment is bullish.  Since our ST is still down trending, we need to be cautious into the long trend or rally, however you look at it.  Once the SYNC is back in place can we consider a more solid case for a protracted down-trend.

We should consider though that a possible diagonal triangle is forming and that this would allow for a new ATH to be established.  Now, this is just an option I am presenting and not backed up by facts.  But if we are looking at the August lows as a corrective pattern which has us continuing an impulsive up-trend we should then consider that this move up currently is finishing off a 5th wave that should take us to new ATH or FAIL.  If the ST turns up, I would look at this option more seriously.

Price in the SPX is currently testing the 200 day MA resistance.  So another clue as well is to see if we get a pull back in 3 waves or more.  This should also help us with the steps we can look at next.

SEN: Bearish
ST: DOWN
PA: NA

Note: If the intra-day signals move back into OS territory, expect an acceleration downwards, and a new low could play out.

13 Nov 2015 - Possibly Not The Low

Upon closer inspection of the various time-frames, there is a high chance that the low is not yet in.  The major reason for this statement lies in the weekly chart where prices have closed below the 75 week MA.  This implication suggest that if the trend is true.. then we should look for a downward move for at least a week or more.  Of course this is dependent on the lower time frames and prices never ever go on a straight line.  However, since my target of 2020 has been met (off by 2 pts.).  I will consider this a short term victory.

The ST again has proven reliable, and while it can be inaccurate in times of high volatility swings, it does also do well in long runs like we had in the Oct. rally. So far it has also been good for the recent turn down.  The SPX at the moment is at risk of an acceleration down as I indicated in yesterdays (PA).  The close today has only increase the odds for more acceleration to the downside so beware of such moves.

The low today also not immediately evident was the Fib. level of 38.2% from the lows of late Sept. to the highs made early this month. Of course this on top of the support of the Daily 75 MA and Lower BB line.  Levels to watch here on out is the lower Fib. retracement levels of 50% and 61.8%..  If the intra-day signals does bounce and moves out of OS or into OB range, we should look to exit any short position.  Ultimately, it will all depend on your exit strategy which will never work if you do not follow it.

SEN: Bearish
ST: DOWN
PA: DOWN

Note:  Last week I mentioned that our Sentiment indicator was at risk of turning bullish and that we needed a big turn-a-round this week to halt it from extending into bullish territory.  This week the movement in price achieved that goal and it still remains "Bearish".   Often times when studying the behaviour of these signals, we can see also the subconscious behaviour of the markets.  How is it that the one signal that a few or no one ever follows warns us that a change of trend needs to occur before the market changes its sentiments?  This is technical analysis, and it's why I believe in it so much.  We just need to fine tune our understanding of it.

12 Nov 2015 - No Man's Land

SPX closed the day with prices in "No Man's Land"..  I would have thought the 200 day MA with the 60 min 200 MA would be strong enough support but markets dictate sentiment and they closed below these levels.  This leaves prices nowhere near any support other than the next 75 day MA and Lower BB that is converging at the 2020 level.

We did however get a positive divergence in the intra-day charts, but this should be confirmed by a rally and signals closing out of OS.

SEN: Bearish
ST: DOWN
PA: DOWN

Yesterday we also noted that prices closed below our Gann angle and high probability exists of more downside.  This is still the case today with the 200 Moving Averages being broken in the immediate time-frames.

11 Nov 2015 - After 2 Days Of Support

Price in the SPX has broken the Gann angle that I drew up on the daily chart posted on Monday.  It only took 2 days and since we broke that angle today, we should look for the next support at the 200 day MA (2063.95) followed by the 200 MA of the 60 min. at 2046.  Yesterday I said that the intra-day needed to stay bearish in order for the daily charts to have a chance to turn bearish.  Although the daily has not turned bearish it is closer to its goal.  We have not been getting any acceleration due to signals out of range from the OB/OS conditions.  The lower time-frames will react first and manipulate the larger time frames so if you are watching the intra-day charts, then watch any time frame to hit the OS/OB range.

SEN: Bearish
ST: DOWN
PA: NA

Note: Some cycle analyst are looking at the 2020 level for a low... I cannot confirm this but it is a level to watch.  2020 is also the 75 day MA...

10 Nov 2015 - Still

Price has closed under the 75 MA of the 60 min. chart and has kept the market relatively flat for the day.  The PA was not signalling any volatile movement currently but that could all change tomorrow if the signal still holds the downward pressure and into the OS range.  The next level of support is the 200 day MA currently at 2063 SPX, then comes the 2040 which is held by the 200 MA of the 60 min. chart.  Until we pass these markers, we cannot see any acceleration in large spreads.

If however the intra-day signals turn bullish tomorrow,  we should be cautious of the turn back UP for the ST as the daily chart is still in a bullish sentiment.

SEN: Bearish
ST: DOWN
PA: NA

9 Nov 2015 - Possible CIT

The signal is now out of OB, which is encouraging for bears but can we call this a CIT?  No, but what we need to see for tomorrow is for the intra-day charts to stay in bearish territory in order for further downside action to occur from the ST.  Prices in the SPX is now resting just above the 200 day MA, and a Gann Angle drawn on our daily chart.  These clusters of support needs to be broken in the following days for a more convincing short trade.

According to the ST though, is that the sentiment has changed short-term.

SEN: Bearish
ST: DOWN
PA: NA

6 Nov 2015 - 75 MA Bounce

Price in the SPX bounced on the 75 MA  of the 60 min. chart as I anticipated now for a few days. This bounce is just short of the 2080 by 3.74 pts.  Currently the signals in the intra-day is bullish while an ST that is on an UP trend.  Therefore there is a higher probability of a move higher.  If the intra-day signals can stay in a bearish position next Monday, we can look for lower low in prices, with a support at the 200 day MA at 2063.

SEN: Bearish (Will turn bullish next week but won't print until EOW).
ST: UP
PA: NA

Note: although the SEN: indicator will turn bullish again next week, I have to warn that the signal will be within the perimeter of the line between being bullish and bearish.  Therefore any trade long or short should be approached with caution until the signal has finally distance itself from the border.

5 Nov 2015 - Still Bullish

Despite the negative day in the SPX, the overall sentiment short-term is still bullish.  The signal did push lower but still in OB territory so there is a lot risk to the upside at this point in time.  The intra-day charts today is a bit more bearish but still OB.  I mentioned that signals would need to push into OS and stay for a prolonged period to give a more sustained move lower.  This has not happened, so we look to tomorrow to see if we can get a picture of how the whole week has formed.  Being in this state however, I can tell you now that if we do not push lower tomorrow then the likelihood of the SENTIMENTS turning Bullish is very high.

We are on that line now and a push into Bullishness might not necessarily be bullish in that a performance the next week if bearish could flip it back to a bearish camp.  This scenario is where we need to call for a more cautious approach.  Therefore, the safe side of the trade is always near any OB or OS situation where you get low risk entry and price acceleration probability.

SEN: Beairsh
ST: UP
PA: NA

4 Nov 2015 - 2080 Revisit

With the SPX intra-day signals at a bearish state, price could continue to the 2080 level where the 75 MA of the 60min can be found.  I am going to be cautiously bearish here since our ST is still in OB.  When dealing with a smaller time frame in anticipating what the ST might do, we need to remember that if we are to put a short position on that we would only assume a temporary trade to the downside since the trade is not in agreement with the ST.  This should remain temporary as such, until the ST can turn down as well confirming the smaller time frame.  Only this scenario would you to add to the short position or keep the existing short.  The longer the signal stays in OS also will indicate the strength of the downward direction.  Reversals often sports a quick reversal from their extreme range.

SEN: Bearish
ST: UP
PA: UP

3 Nov 2015 - Counts Are Getting Stupid

As you can see from the chart below the counts are getting to be stupid, but this is the nature of EW.  Countless editing and options laid out on the table, and little by little replaced by another count or nullified altogether.  The most important thing here really is to recognize the phase of price that we are in and as suggested by the ST in early Oct. it was up.  Amazing how we always look back and say "why didn't I follow that".  Well, like I have mentioned in the past.. Human emotion and instinct are driven to be better.  It is not that we cannot beat an indicator or a theory, the question is the consistency of your strategy and theory vs the consistency of the indicators.  I write these blogs to constantly remind myself and learn from my analysis what works and doesn't work, and find enlightenment when time over time, indicators always come out the winner in the consistency category.  Of course, if you do not follow your own rules, no indicator can remedy the mistake or loss.

So far today everything has stayed relatively the same as yesterday.  New highs as we anticipated in an OB reading.  This will continue to be the higher odds when in this environment.

SEN: Bearish
ST: UP
PA: UP

As always to confirm a move lower, one should look for a move to the OS by the indicators in the intra-day level for us to anticipate that a CIT or a short term move lower has occurred.

2 Nov 2015 - OoPs..

This is the type of moves that happens when conditions are OB.  Despite what I am inclined would happen (which is a turn down at the least).  The indicators have once again been the one who told us so.  The OB and Up-trending condition the indicator has been is pushing prices to extreme.  Is this a run-away bull market?  It is close and a push to higher highs would either put us in a larger degree Neg. Divergence or a new bull signal on our "Sentiment Signal".

As it stands, nothing has changed in our indicators...

SEN: Bearish
ST: UP
PA: UP